Within the next year, Laredo officials say local custom brokers could begin operating under more flexible rules for the creation of duty-free zones that would allow more rapid shipment of goods.
City staff is preparing an application with the U.S. Foreign Trade Zones Board to reorganize Laredo’s Foreign-Trade Zone No. 94 as a county-wide alternative site framework.
Customs brokers currently must operate within seven designated zones or undertake a months-long application process to approve a site elsewhere.
Under the proposed arrangement, designating a warehouse a foreign trade zone site would take a matter of weeks.
A foreign trade zone allows merchandise to enter the United States free of duties as long as it remains within that location.
“The product never actually enters the economy of the United States,” explained Tim Franciscus-Timm, Laredo Airport marketing director.
Foreign Trade Zone 94, which was established in Laredo nearly three decades ago, designated seven sites.
Those locations include: Laredo International Airport, the Tex-Mex railroad switching yard, Killam Industrial Park, Unitech Industrial Park, Embarcadero Industrial Park, a site at Colombia Solidarity Bridge and the still-undeveloped La Barranca Ranch.
Four other trade locations outside of those sites have been established through a time-consuming process called temporary boundary modification.
The most recent boundary modification approved in the city created a Foreign Trade Zone site for Sony Corporation in East Point Industrial Park.
After receiving priority assistance from the city, the site was approved in 45 days by the Foreign Trade Zones Board, part of the International Trade Administration.
That was the fastest approval for a temporary boundary modification so far.
Others have taken between eight and nine months for approval.
The alternative site framework would allow a company to apply to be an operator within the trade zone and be approved within two weeks, Franciscus-Timm said.
“If you want to set up a warehouse anywhere in Webb County, it is a much shorter process, it’s a much simpler process … to set up a foreign trade zone,” he said.
Guillermo Aguilar, owner of Infinito Global Logistics, currently operates out of Unitech Industrial Park Foreign Trade Zone.
The new arrangement would not provide any advantage to his business, but he said it would be good for the community as a whole.
He said the customs process allows goods to leave a foreign trade zone location at high speed compared with manual inspection at bonded warehouses.
The largest commodity to flow through Laredo is automotive goods.
Aguilar said a plant shutdown could cost hundreds of thousands of dollars, so a flexible and quick moving supply chain is critical for the industry.
Foreign trade zones allow Laredo warehouses to operate as distribution centers, shipping parts originally from Asia to a manufacturer in Mexico at a moment’s notice, he said.
“They can have a ready supply here in Laredo that can hit Monterrey in three hours, San Luis Potosi in eight or Mexico City in a day,” Aguilar said.
Fifty-four communities have already converted foreign trade zones to an Alternative Site Framework, including five in Texas.
Eighteen more have applications pending approval.
Tucson and San Diego are the only border cities to establish the new framework.
Laredo City Council authorized city staff to move ahead with the application process at its Jan. 17 meeting.
The city’s bid will call for the foreign trade zone to cover all of Webb County, the most common type of application.
Tim Truman, a spokesman for the International Trade Administration, said the approval process for alternative site frameworks typically lasts about six months.
Customs and Border Protection would continue to bear responsibility for inspecting and verifying the goods leaving the foreign trade zone.
And the input of the local Customs port director will be a large factor in the board’s approval of the application.
The new framework could help foster competition in the foreign trade business in Laredo, said Victor Gonzalez, president of the Laredo Licensed U.S. Custom Brokers Association.
“It just makes it a lot more easy to activate their current facilities (as foreign trade zones) wherever they may be,” he said.
“It helps businesses be more flexible.”
Franciscus-Timm said the city would also use the designation to promote Laredo as a destination for international commerce.
If the application is approved, it would be included in the city’s pitch to the industry at the annual Foreign Trade Zones Board conference in September in San Diego.
(Andrew Kreighbaum may be reached at 728-2538 firstname.lastname@example.org)
Taken from an article in the Laredo Morning Times